FIN-FSA investigated 86 suspicions of securities market abuse during first year-half
In January-June 2014, FIN-FSA had 86 cases of suspected securities market abuse under investigation (70 during the corresponding period in the previous year).Out of these cases, 26 (32) are related to the abuse of insider information, 18 (26) to market manipulation, 34 (10) to the disclosure obligation under the Securities Markets Act and 8 (2) to other types of abuse.
FIN-FSA investigates suspicions of market abuse at its own initiative, but it also receives information on suspicious cases through notifications and tips eg from the stock exchange, market participants, the media, individual investors and foreign supervisory authorities.
Finnish investment service providers and branches of foreign investment service providers located in Finland are under the obligation to notify FIN-FSA without delay if they have reason to suspect that a transaction may involve abuse of insider information or market manipulation. The notification obligation was extended as of the beginning of 2013 also to personnel employed by providers of investment services. During the review period, 30 (20) notifications were received from investment service providers. A major proportion of these came from foreign service providers. A large part of the notifications are related to suspicions of abuse of insider information. The stock exchange made 13 (21) notifications.
A notification related to market abuse is not by nature a request for investigation, but an exceptional transaction or matter noticed by a party under the notification obligation, which may give grounds to suspect that the transaction could involve illegal use of insider information or market manipulation. Suspicion may arise if the transaction involves something atypical based on general experience. Parties under the notification obligation are not expected to investigate transactions or their background.
Annual variation in the number of cases investigated
The number of cases investigated always involves some annual variation reflecting for example economic activity and, to some degree, also the current focus areas of supervision. The number of notifications on abuse of insider information and related investigations generally increases in line with an increase in economic activity, corporate transactions and profit warnings. Cross-border corporate transactions also typically increase the number of notifications from abroad, hence also affecting the number of insider cases investigated. Meanwhile, the number of suspicions of market manipulation generally increases when equity prices show large fluctuations.
The figures on the disclosure obligation contain inspections related to the ongoing and regular disclosure obligation of listed companies, the obligation to disclose major shareholdings and the offering of securities. Supervision focused particularly on the disclosure of major shareholdings and offering of securities, which increased the number of disclosure obligation cases investigated from the corresponding period of the previous year.
The table contains all requests for investigation made by FIN-FSA and administrative sanctions issued by FIN-FSA by 30 June. FIN-FSA made two requests for investigation to the police, issued one public warning and ordered two administrative fines.
The Market newsletter 2/2014 describes in more detail how FIN-FSA supervises disclosure obligation of listed companies and trading on the securities markets (in Finnish, will come out in English in July 2014).
For further information, please contact
- Jarmo Parkkonen, Head of Department, tel. +358 10 8315255
- Laila Hietalahti, Market Supervisor, tel. +358 10 8315244